Under Mayor Breed’s Prop C Waiver legislation, companies can voluntarily contribute their estimated tax liability while the ballot measure is held up in the courts

San Francisco, CA — Mayor London N. Breed today announced that Salesforce and Postmates will participate in her Proposition C Waiver legislation, co-sponsored by Supervisor Vallie Brown, which allows companies subject to November 2018’s Proposition C gross receipts tax to voluntarily agree to waive their right to a refund should that legislation be found invalid by the courts.

The estimated contribution from the two companies represents $14 million that will now go to fund programs to address homelessness. The new funding will be used to invest in building more shelters, expanding problem-solving interventions to prevent homelessness and to quickly stabilize those who become homeless, fund new behavioral health beds, deepen investments to help families who are newly homeless get rehoused quickly, and build new permanent supportive housing for adults, families, and youth exiting homelessness.

“I want to thank Salesforce and Postmates for stepping forward to allow their tax revenue to start funding homelessness programs immediately while Prop C continues through the courts,” said Mayor Breed. “We know we have too many people suffering on our streets, including people with severe mental health and substance use issues. With these resources we can use targeted investments to get the care, shelter, and housing that people in our City need.”

“I want to applaud Salesforce and Postmates for their leadership in committing these funds now to help address our homelessness crisis,” said Supervisor Vallie Brown. “Their decision to do so is in tune with everyday San Franciscans, and I hope we’ll see more of this leadership from across the private sector. These funds are going to make an immediate positive difference in the lives of San Franciscans struggling to survive on our streets, and I’m very grateful for that.”

Proposition C, a tax to support homelessness and housing services, passed with roughly 61% of the vote and is currently held up due to legal uncertainty. The funding from the legislation is being collected, but due to litigation risk, the Controller is not authorizing the City to spend the funding. Should the courts rule that Prop C was required to meet a 2/3 vote threshold, the money being held by the Controller will have to be refunded. The funding will be held in escrow until a final decision is made by the courts.

“Companies like Salesforce and Postmates are part of the solution to this crisis,” said Jeff Kositsky, Director of the Department of Homelessness and Supportive Housing. “This is one of many examples of how the private sector and philanthropy help the thousands of San Franciscans struggling to move beyond homelessness.”

With Mayor Breed’s legislation, companies subject to the Prop C gross receipts tax can choose to waive their right to have a portion or the total of their taxes refunded if the courts ultimately require the 2/3 threshold to be met. In return for waiving these recovery rights, the companies receive a 10% tax liability deduction. This frees up funding that the City would otherwise be unable to spend until the matter is settled in court.

“The crisis of homelessness is the most urgent challenge facing our city—and it cannot be solved by government alone,” said Marc Benioff and Keith Block, co-CEOs of Salesforce. “We need more San Francisco companies to step up and participate in Mayor Breed’s Prop C Waiver legislation to give our homeless neighbors the help they desperately need.”

“Homelessness in San Francisco is an all-hands-on-deck crisis. And in the city where I built my business and am raising my family—I recognize with unequivocal importance that individuals, businesses, and lawmakers alike all have a responsibility to do our part in creating access to opportunity for anyone who calls these seven square miles home,” said Postmates Co-Founder and CEO Bastian Lehmann. “That’s why I am proud to stand with Mayor London Breed and put Postmates’ tax dollars to work right away helping our homeless neighbors. A new generation of tech leaders must step up, do our part, and be working partners, not sparring partners, with the City in designing policies that accountably invest City dollars towards creative, effective, efficient new ways to take care of our fellow residents.”

The City will use the $14 million in Prop C waiver funds in accordance with requirements in the ordinance. These resources will specifically be used to:

$1.36 million to expand temporary shelter capacity by investing in the development of new shelter beds.

$2.04 million to expand problem-solving interventions to prevent and quickly address homelessness for newly homeless households in crisis.

$3.4 million to operate additional residential treatment beds for people experiencing homelessness and also suffer from behavioral health challenges.